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November 2018
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Friday, 26 October 2018 17:00

Difference between soft Brexit and no deal worth £30bn

Difference between soft Brexit and no deal worth £30bn

The impact of Brexit on next week’s budget has been spelled out by Britain’s National Institute of Economic and Social Research (NIESR), with the difference between a soft and no-deal outcome worth £30bn over the next five years for Philip Hammond, Caspian Energy News (www.caspianenergy.net) reports with reference to The Guardian.

It warned that in case if a no-deal Brexit the pound would fall in value, inflation would rise and the economy would barely grow for two years. The stark difference for the public finances from a deal or no-deal Brexit is likely to become an increasingly important political battleground over the coming months, and could feature heavily at the budget on Monday.

Although UK Prime Minister Theresa May pledged to “end austerity” in her speech to the Conservative party conference this month, she warned that the government would need to secure a “good Brexit deal” before it would be able to outline its approach to tax and spending next year.

In its analysis, NIESR said a soft Brexit deal would constitute the UK retaining access to the European Economic Area and customs union. Free movement of workers and EU budget payments would be maintained, which is likely to face stiff political opposition.

Compared with a soft Brexit scenario, no-deal would cause annual output to be about 5.3% smaller over 10 years. UK economic growth would only be 0.3% in both 2019 and 2020, compared with 1.9% and 1.6% in a soft-Brexit scenario.

More details: https://www.theguardian.com/uk-news/2018/oct/26/difference-between-soft-brexit-and-no-deal-worth-30bn-analysis

Person in charge of the newsline: Olga Nagiyeva 

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